The UK’s pharmaceutical market is the ninth largest in the world, making a greater contribution to the UK economy than any other sector. However, growth rates have slowed in recent years: pharmaceutical R&D capital expenditure in the UK fell by around £359m from £496m in 2002 to just £137m in 2012, while in pharma manufacturing in particular, capital expenditure declined from a peak of £1bn in 2001 to just £422m in 2012.1
According to the AMA Research Pharmaceutical and Biotechnology Construction sector report1: ‘The greatest barrier to capital investment in the UK over the past few years has been the lack of financial incentive to locate new manufacturing plants in the country.’
Leading pharmaceutical companies will now find themselves with greater responsibility for health, safety and welfare in construction projects than ever before due to the regulatory changes
However, trends are beginning to reverse. The North East of England Process Industry Cluster, which represents a large number of pharma companies based in the region, has committed to investing £7bn into the area by the end of the year, as well as attracting some 16,000 new employees, all of which is likely to include the upgrade of existing (and construction of new) facilities. Nationally, the UK government has also announced plans for £200m worth of capital projects in the sector during the period covered by the AMA Research report.
Leading pharmaceutical companies are also beginning to announce expansion plans, meaning that they will now find themselves with greater responsibility for health, safety and welfare in construction projects than ever before due to the regulatory changes.
Construction remains one of the most dangerous industries, with workers four times more likely to be killed at work than in any other industry. The CDM regulations, which officially come into force on 6 April 2015, with a six-month transitional period before the deadline date of 6 October, seek to improve compliance with a raft of essential health and safety legislation.
Although the technical standards covered by Part 4 of the updated regulations remain largely unchanged from the guidance related to CDM 2007, there are several notable changes to CDM regulations that apply to all commercial businesses of any size and will therefore affect pharmaceutical manufacturers.
With the role of CDM Co-ordinator now made obsolete, manufacturers must take an overseeing role in their construction projects with the support of their Principal Designer (PD), which can be an organisation or an individual who is responsible for the pre-construction phase and oversees design and planning, and their Principal Contractor (PC) throughout the project.
In contrast to the previous regulations, a CPP is now required for all construction projects – regardless of the duration of the build or the number of workers on site
These roles must now be filled where there is more than one contractor working on a project, regardless of size or duration. Initially, they must ensure the PD and PC have the necessary skills, knowledge, experience and organisational capability to manage health and safety risks. Pre-construction information must then be compiled by the client and issued to both parties, providing critical and high-risk information that is crucial in allowing them to ensure the relevant welfare facilities are in place and that health & safety arrangements are implemented with regular reviews as the project progresses.
The PD will develop the H&S File, but the project owner must take reasonable steps to ensure that both the PC and PD comply fully with all their duties and adhere to all relevant legislation including the Health and Safety at Work Act, Work at Height Regulations and RIDDOR.
It is also now the job of the pharmaceutical manufacturer to ensure the PC prepares a thorough Construction Phase Plan (CPP) for all projects where relevant that outlines the health and safety arrangements, along with site rules and measures to control the hazards and risks specific to each site. In contrast to the previous regulations, a CPP is now required for all construction projects – regardless of the duration of the build or the number of workers on site. It must also be completed if there is only one contractor (and therefore no PC).
For the purposes of the CDM Regulations ‘construction’ is defined as any building, civil engineering or construction work, so the regulations cover extensions, alterations and conversions, as well as completely new builds, and also apply to demolitions. This definition is important as refurb projects are growing – the JLL/Glenigan Commercial Construction Index reported that refurbishment projects saw an increase of 8.7% to a value of £10.8bn in the period covered by the Index, exceeding the growth in new build schemes (4.7%, £11.9bn).
Pharmaceutical manufacturers also now have a responsibility to inform the HSE of larger construction projects via an F10 form if the project is either expected to last more than 30 days and have more than 20 workers on site at any one time, or will exceed 500 person days in total.
For projects which began before 6 April 2015 but have not yet moved into the construction phase, a PD must still be appointed. If a CDM Co-ordinator is already in position, they can continue in their role up until the final deadline of 6 October but if the project extends beyond this date, they must be replaced by a PD by 6 October at the latest to ensure compliance.
As the pharmaceutical industry comes under increasing pressure to develop new compounds, and as more sophisticated manufacturing technology is required to meet this demand, the design and construction of cleanrooms, laboratories and production facilities will inevitably have to evolve. The need for more highly specialised, bespoke R&D and manufacturing facilities will see an increasing number of pharmaceutical companies looking to progress construction projects, meaning it is essential for them to be up to speed on the responsibilities placed upon them by the amended CDM regulations.
Reference
1. AMA Research: Pharmaceutical and Biotechnology Construction Sector Report – UK 2014–2018 Analysis
